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Regulation

Editor's picks

‘Nanny Ofgem is missing the bigger picture’
Ofgem’s proposal to make energy suppliers repay surplus credit balances has received mixed reactions. Is the regulator cracking down on unsustainable business models or choosing short-term wins over a permanent fix for a broken market? Adam John asks what this latest crackdown says about the nature of regulation in energy retail.
Analysis
Premium on WPD sale is ‘big help’ to Ofgem
The “significant premium” National Grid has agreed to pay for Western Power Distribution could undermine the former’s argument that the cost of equity being offered by Ofgem in RIIO2 is too low, according to Investec senior analyst Martin Young. He shares his thoughts on the deal with Utility Week as well as his predictions for the sale of National Grid’s gas transmission arm.
News
Drawing a line under PR19
The publication of the Competition and Market Authority(CMA)'s water redeterminations justify why a record four companies sought an appeal. With gains made on all sides Utility Week explores what has been won and lost.
Analysis

Featured

Is a just transition realistic?
The principle of no customer being left behind in the shift to a smarter, more flexible energy system is hard to argue with. However, some experts believe that in the short-term a just transition is just impossible. As part of our Countdown to COP campaign, James Wallin examines different pathways to fairness – from ensuring the most vulnerable benefit first to the introduction of non-participant tariffs.
Analysis
No time to waste on securing net zero investment
Leading private investors in infrastructure are estimated to have at least $200 billion of “dry powder” available for deployment. However, for the UK to unlock this potential to power its decarbonisation push there is an urgent need for regulatory reform and political clarity, writes GIIA chief executive Lawrence Slade.
Opinion
Major utilities backer warns Ofgem ‘investments must be profitable’
As part of our Countdown to COP series, Utility Week speaks to Charles Tsai, chief executive of Power Assets Holdings, which together with sister company CKI Infrastructure owns Northern Gas Networks, UK Power Networks and Wales & West Utilities. He discusses the need for a clear investment mechanism to unleash the funding required to reach net zero and for the UK government to make commitments on decarbonisation of heat and transport.
News

Latest in Regulation

Current system ‘doesn’t value storage and flexibility’
The ability to navigate the peaks and troughs of an increasingly intermittent energy system requires long-term thinking about storage and flexibility. But, as experts tell David Blackman for the latest feature in our Countdown to COP series, substantial work is still needed to introduce the right market structures.
Analysis
ESO fined for inaccurate demand forecasting
National Grid Electricity System Operator (ESO) has agreed to make a £1.5 million redress payment after an investigation by Ofgem found it had breached its licence conditions by failing to provide accurate and unbiased demand forecasts. The regulator said it does not believe the ESO deliberately set out to breach its licence conditions but “did not put in place adequate senior oversight and compliance controls to identify and mitigate this behaviour.”
News
Fletcher’s reflections on water
Ofwat’s freshly departed chief executive Rachel Fletcher talks to Utility Week about her highs and lows in the water sector - from price reviews, social contracts, CMA appeals and how the sector rebounded from what she described as its darkest point.
Interviews
A busy month for CMA watchers
The past month has seen announcements on the three sets of appeals that should be on a Competition & Markets Authority (CMA)-watcher’s radar – the granting of permission on the RIIO2 appeals, the final decision on PR19 in water and the decision on the rather obscure SSE code modification appeal. Maxine Frerk picks through the pertinent points and discusses the next steps.
Analysis
CMA panel for RIIO2 appeals announced
The Competition & Markets Authority (CMA) has appointed the panel to determine the RIIO2 appeals, as well as updating on the timeline for the process.
News
CMA orders joint appeals on cost of capital in energy
The Competition and Markets Authority (CMA) has granted permission for energy networks to appeal their final determinations for the RIIO2 price controls. However, this is subject to the condition that some of the common grounds of appeal are joined across appellants.
News
New RO mutualisation arrangements come into force
New arrangements to link the renewables obligation (RO) mutualisation threshold to the annual cost of the scheme have come into effect. Mutualisation has long been a source of contention in the energy sector, with compliant suppliers obliged to pick up the shortfall when others do not pay. BEIS is also considering whether changes need to be made to the way the mutualisation amount is calculated.
News
On the Move: Electralink CEO departs
In Utility Week’s latest round-up of people moves across the sector, Electralink’s chief executive has left the company after a decade. Meanwhile, Ofwat’s strengthens its board and Jonathan Brearley takes on a new role.
News
Electricity market needs reform to stop ‘drift to central planning’
The government has been urged to “stop the drift to central planning” by phasing out the Contracts for Difference and Capacity Market schemes by the mid-2020s and replacing them with a mandate on market participants to bring about decarbonisation. The Energy Systems Catapult said they have been effective in increasing renewables' share of the electricity mix but are now “progressively undermining wholesale markets” and creating a situation whereby “policymakers effectively choose which technologies to support”.
News
CMA rejects SSE appeal
The Competition & Markets Authority has dismissed SSE’s appeal against Ofgem’s approval of a code modification removing residual transmission charges from generators. It comes as SSE updated the market on its financial year, revealing a £180 million hit from coronavirus and a worse than expected shortfall in output from renewable generation.
News
Four suppliers fined after overcharging customers
Four energy suppliers have paid more than £171,000 in redress after they failed to offer certain types of tariffs to customers with restricted meters. Around 4 million customers in Great Britain have a restricted, or ‘profile class two’ (PC2), meter. They allow customers to be charged for electricity at different rates, depending on the time of day they use their energy.
News
WPD: Answering our critics
Western Power Distribution chief executive Phil Swift explains how the company has responded to calls to be radical and ambitious in the second draft of its business plan for the RIIO ED2 price controls beginning in 2023.
Opinion
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